May. 11, 2004

Governor backs out of $10 million fitness plan for schools

MADISON, Wis. - Gov. Jim Doyle has ended a $10 million partnership with a nonprofit foundation for new fitness facilities in Wisconsin schools.

Doyle had touted the effort with the National School Fitness Foundation in his State of the State speech in January.

The state was to contribute $5 million from private fund raising, and the foundation would provide the other $5 million for fitness programs in 100 schools within the next three years.

Doyle withdrew the state's commitment because of questions about the foundation's ability to provide financial support after an investigation by Minnesota officials.

Minnesota Attorney General Mike Hatch said the foundation has been using a pyramid of Ponzi scheme to use money from newly enlisted school districts to pay off those that signed up earlier to buy or lease-to-buy fitness equipment and training.

Last week, the foundation, based in American Fork, Utah, notified the 600 participating schools in 18 states it would not make its payment obligations this month because of slower-than-anticipated fund raising.

In a letter sent Thursday, Doyle's deputy chief of staff and chief legal counsel Stan Davis told the foundation Wisconsin was backing out.

"Gov. Doyle recognizes the need to promote physical fitness in our schools and strongly supports the mission and ideals upon which the LIFT America curriculum was based," Davis wrote. "However, due to recent events and the acknowledgment that NSFF will be unable to meet its obligations, he must withdraw his support of the program."

Cris Rees, the foundation's vice president of public relations, called Doyle's decision a political move and accused Hatch of undercutting his group's fund-raising efforts.

The $5 million commitment from Doyle was the foundation's first from a state government, Rees said.

Under the program, school districts apply for a three-year lease on equipment to implement the foundation's health and wellness curriculum. The equipment is purchased from School Fitness Systems, a for-profit group affiliated with the foundation.

School Fitness Systems then pays royalties on the equipment to the foundation, which reimburses schools for their lease payments if students are meeting the program's goals.

The foundation does not guarantee all payments will be reimbursed, but had not missed any payments in its four-year history until this month, Rees said.

The Kimberly Area School District was the state's only to launch its fitness initiative through Doyle's program. About 10 others were applying to join.

Gary Kvasnica, the district's director of business services, said it opened the new training center in April at J.R. Gerritts Middle School. It had yet to make its first $6,500 payment.

"We'd have to come up with $78,000 a year," he said. "Would we continue to use it? I'm assuming we would ... but we're in a state of limbo."

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